“Western housing shortages do not just prevent many from ever affording their own home. They also drive inequality, climate change, low productivity growth, obesity, and even falling fertility rates.” It’s a bold claim, but I think it’s spot on. So do many others from across the political spectrum, for whom it is the biggest policy failure of our time.
Central to the damage is the impact on innovators and entrepreneurs, who are held back by the high cost of housing and office space – even if many are unaware.
Talent is priced out of our most productive cities, threatening the position of the UK's entrepreneurial ecosystem. British startup employees have to face long commutes, over-crowded conditions, and lower disposable incomes. They are discouraged from taking entrepreneurial risks, and the growth of their businesses is curtailed. They struggle to hire and retain the best and brightest.
We want to change this, and are optimistic that we can. There are some great ideas already out there, some of which are on the cusp of legislation, such as Street Votes, which I’ve written about before.
We were inspired by what’s happening in the US. And certainly, Silicon Valley provides a cautionary tale. An inability to build enough homes, to tackle excessive rents, has led to an exodus of founders and investors. There is also a policy backlash against this in America and we want to lead the business case here.
We have a paper ready to launch making the case for building more houses and office space – and we want you to publicly back us.
First, read our short letter to understand what we want.
Second, if you agree that fixing housing policy would help your business, then we encourage you to take less than a minute to sign our open letter (which will be published in a newspaper).
If you have any questions or would like to read the paper (under a strict embargo), get in touch with my colleague Aria Babu, who has written the report.
Here Comes
There is no new thing under the sun. Including the Levelling Up missions, which look suspiciously similar to Theresa May’s Industrial Strategy missions. It’s not just 332 pages of cut and paste from the former government and Wikipedia, though there’s some of that.
While Leeds City Council leader James Lewis was “disappointed” that "there were more mentions of Medieval Italy than there were of Yorkshire in the levelling up paper," and while there were only a couple of mentions of “entrepreneurs”, there’s still much to interest businesses.
The 12 missions, if achieved by 2030 (as planned), would be good for British entrepreneurs. But that’s a very big “if”. After all, it would be something of a miracle if whoever is in power will still be using the term “levelling up” by then. That said, provided they’re rebranded, they’re reasonable, and, crucially, quantifiable goals.
The most relevant mission to entrepreneurs is the second one: “By 2030, domestic public investment in Research & Development outside the Greater South East will increase by at least 40% and at least one third over the Spending Review period, with that additional government funding seeking to leverage at least twice as much private sector investment over the long term to stimulate innovation and productivity growth.”
The Department for Business, Energy, and Industrial Strategy (BEIS), for example, has committed to invest at least 55% of their domestic R&D funding outside the Greater South East by 2024/5.
The White Paper also announces three new Innovation Accelerators, which will be major place-based centres of innovation, centred on Greater Manchester, the West Midlands, and Glasgow City-Region: “These clusters of innovation will see local businesses and researchers in these areas backed by £100 million of new government funding to turbo-charge local growth, learning from the MIT-Greater Boston and Stanford-Silicon Valley models.”
Despite some positives, Centre for Cities concludes that The White Paper lacks the funding to deliver and doesn’t offer a plan beyond 2030. The Joseph Rowntree Foundation considers it a valuable start that falls short, while Policy Exchange is encouraged by the innovation policy.
It's certainly worth a skim – if only for the early mention of Thebes 1360 BC.
(Incidentally, one nifty thing to come out of the levelling up project is this subnational indicators explorer, which allows you to compare your area with others.)
Danker Schön
It’s great to see the CBI making bold demands of government, such as replacing the temporary super-deduction with a permanent 100% tax deduction for capital spending, and establishing an Office for Future Regulation to support a more dynamic framework for post-Brexit Britain. If you have an hour to spare, it’s worth watching Tony Danker’s speech and interview with the Centre for Policy Studies.
Access All Areas
I’m delighted to announce that we’re partnering with Enterprise Nation on a new project: Access All Areas. Led by Emma Jones CBE, the incredible founder of Enterprise Nation, and guided by a panel of around 30 small business owners, over the course of the year we will produce four briefing papers on key things we think small businesses need better access to: finance, people, markets, and government.
We’re busy building the panel of Members for our Small Business Forum ahead of our first virtual roundtable on 21st February. We have a couple of places left, so if you’re a small business owner with a passion for policy, drop us an email with details about you and your business and we might be able to squeeze you in.
Time to Build